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SoundHound AI has only been publicly traded for roughly three-and-a-half years, but it's been a huge winner.
The business's stellar sales growth has helped power big gains for the stock.
Investors have also been willing to embrace valuation premiums for top AI stocks.
Despite some big valuation swings, SoundHound AI (NASDAQ: SOUN) stock has delivered huge wins for patient investors. The company went public through a merger with a special purpose acquisition company (SPAC) in April 2022 and got off to a bit of a soggy start following its debut, but shareholders who took a buy-and-hold approach to the conversational artificial intelligence (AI) specialist have been richly rewarded.
In fact, a $10,000 investment made in SoundHound AI stock three years ago would now be worth more than six times that amount.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Getty Images.
Over the past three years, SoundHound AI stock has delivered a return of 570%. That means that a $10,000 investment made in SoundHound AI stock three years ago would now be worth approximately $66,980 if you had held on to your position. How has the company been able to deliver such incredible returns for shareholders?
For starters, the business has been serving up very strong sales growth. With the company's last quarterly report, sales reached $42.7 million -- up 217% year over year. Along with the strong sales result, the company also raised its full-year sales guidance to between $160 million and $178 million -- suggesting annual growth of nearly 100% at the midpoint of the guidance range.
Along with very strong sales growth, excitement surrounding long-term opportunities in the AI market has meant that SoundHound has been able to command valuation multiples that bake in a lot of strong future growth. As of this writing, the company is valued at approximately 43.5 times this year's expected sales -- but investors have been willing to pay a premium to own the stock in hopes that its incredible sales growth eventually gives way to very strong earnings.
Before you buy stock in SoundHound AI, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoundHound AI wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $593,442!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,269,127!*
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*Stock Advisor returns as of October 27, 2025
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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